How being frugal is different from being cheap!
Written By: Nick Nguyen | Read full profile
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“Unfortunately, most Americans dismiss frugality because they confuse it with cheapness, thinking that frugality is all-or nothing: ‘Frugal people don’t spend money on anything! I’m never going to cut all my spending, so forget it.”
I, unfortunately, confused cheap and frugal my entire life. I mean there are SO MANY stereotypes out there about how asian people are cheap. Luckily, I learned early to embrace it instead of taking it as an insult. But penny-pinching was the only big regret I had while I lived in California.
I have so many regrets on things that I missed out on while in undergrad because I was too busy worrying about $0.20 instead of being truly happy. Moral of the story: I’m a cheapskate...or as my dad likes to say “you’re a cheapcake.”
What I learned from I Will Teach You To Be Rich was that I really wanted to be frugal. In his book in Chapter 4, Ramit has this beautiful table that was just mind blowing. He compared what Cheap people would do or say to what frugal people would. Now I don’t want to give away the punchline, so you should really grab a copy of his book here.
But he essentially showed me why I was living my life wrong because I thought about spending money the wrong way.
Cheap people focus on how much things cost, and this affects the people around them.
Frugal people focus on how valuable something is, and this only really affects themselves.
This was a lesson my parents were trying to teach me my entire life, but my dense mind couldn’t comprehend it until I actually started hustling.
I was the type of guy who would take a 3 hour bus ride to save $30 on a textbook that I would probably never read. I drove 30 minutes to a Harbor Freight to use a 25% off coupon to buy a tool set that broke on me after 5 uses.
Just thinking about the opportunity cost I lost there from thinking about the value of time and energy that I was too dumb to see.
I really wished that I had instead just driven 5 minutes to Walmart to buy a solid Stanley tool kit with a lifetime warranty the first time instead of wasting those 30 minutes and having to spend more than I initially anticipated anyways.
| Taking a 3 hour bus ride to save $30 on a textbook | Spending 5 minutes to order the book online and then going to do a fun side hustle to make that $30 back |
| Driving 30 minutes to buy a harbor freight tool set for $10 with my 25% coupon and it breaking less than 6 months later. |
Driving 5 minutes and buying a $20 Stanley tool set with a lifetime warranty. |
For those of you who don’t know, I’m a DIY garage mechanic, and I learned this lesson the hard way. I ended up spending 3x as much money on tools after the bargain-priced tools pooped out on me. In fact, I spent $50 on this 2-Ton jack set that I thought was a steal, but took me 1 hour to do an oil change. That jack broke after 2 years, so I did get good use out of it. But when I upgraded to the 3-Ton $120 jack at Costco, it took me 10 minutes to do an oil change...and I felt way safer going under the car too.
My dad still makes fun of me and reminds me that I’ve wasted so much money on crappy tools...but he’s right. All I could say was that I was wrong and I should’ve just splurged the first time, cause I’ll never get that time, money, and energy back.
If I had a frugal mindset, I would’ve just seen the value in having quality stuff, spent the extra money up front and then seen the long-term gains. Especially nowadays when most stuff that you buy isn’t that good old “Made in America” or “Made in Japan” quality. You know...like Toyotas back in the 90s?
But that doesn’t mean that I’m going to pay full price. To some extent, I find joy in being cheap. My years of price matching and couponing has at least gotten pretty streamlined. I know exactly what’s a great price, good price, and fair price for...almost anything. And I know when everything should typically go on sale and where to find the best deal. Not to mention, I really love haggling. So if it only takes me 5 minutes to save $20, and I feel really happy afterwards...why not? I’m getting both a monetary and a psychological win!
I believe there’s this balance between being cheap and frugal that’s different for everyone and that continually evolves for individuals as the value of their time goes up. For instance, if you’re making $5,000/hour, then maybe saving that $20 really isn’t worth your 5 minutes! Or if you feel silly looking for coupons and hate spending hours on hours doing price comparisons over the internet, then maybe paying full price is the way to go for you.
But at the end of the day, I learned that it’s about seeing the value in your choices not the cost of your choices. I shouldn’t never want to spend my money or spend as little as possible...I should instead spend it on the things that are worth it.
What are your thoughts? Feel free to pop a comment down below or reach out to us at TalkToUs@nguyeninglifestyles.com so we can get your thoughts on this topic! Let’s all be rich and build wealth together, because what’s the point of having money if you can’t share it with the people you care about.
*Nguyening Lifestyles is not a registered financial service provider and does not give financial advice. All information in these posts are for entertainment purposes only. Nguyening Lifestyles is not liable for any actions or outcomes that transpired after your reading of the following post.
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